What is Currency Chest(CC)?

Currency Chest

You might have been told by bank employee somewhen that 'we are not getting money from currency chest how we can give you money' or surely you could have heard people saying that all ₹1000 and ₹500 notes have disappeared appeared from currency chest. Did You ever try to know about this term? If not, you are on the right place to understand it in very simple language.

Let's try to understand this term without any technical terms...

What is it?

For circulation of new currency,recycling of old currency and for storing surplus cash, for maintaining all such works RBI governs a kind of Treasury stores.These Treasury stores are called Currency Chests.

Means, currency chests are the branches of some selected banks which are authored by Reserve Bank of India to stock rupee notes and coins in it. As we know, that It is the sole responsibility of Reserve Bank of India for circulation of currency across Nation. How many number of notes are to be printed is advised by RBI to Centre. It is decided using the statistical data of economic growth rate of inflation, definition and various economic scenerios etc. Now when the notes are printed and coins are minted these are sent to RBI offices situated in various cities.

After this these are sent to the currency chest(the place where notes and coins are placed to be circulated further).

Reserve Bank of India has over 2075 currency chests across India and 3746 small coin depots. It has offices at 31 locations. According to RBI every bank should have modern facilities and Chest Balance Limit(CBL) of at least 1000 crore to have currency chest.

RBI identifies the institutional framework of currency chest with the bank for the purpose of an effective cash management.

Why are Currency Chest important?

We all have seen the time of demonetisation we gave our old currency notes of 500 and 1000 to the banks and in exchange of them we received the new currency notes. The currency notes taken from us and new currency notes to be given to us must have been kept somewhere. These places were  Currency Chest of banks .Without this currency chest it would have been very difficult for challenging to circulate the money to the citizens.

Roles of currency chest

So far we have understood the term and are able to understand roles of Currency Chest  these are:

1.To distribute new currency notes.

 

2.To recycle of old notes.

3.To keep Cash Reserve Ratio of banks.

 

4.To arrange for exchange of mutilated and other notes etc. are the main roles played by currency chest.

How will the loss be recovered in case of any problem?

In case of any theft, fraud and robbery from the Currency Chest located in the bank only the bank will be responsible and liable to pay the loss of this currency chest.

The bank will also have to file a fraud monitoring report with RBI.